New Digital Music Survey Offers Signs Of HopePosted: October 14, 2008LONDON (Hypebot) – A new UK consumer survey suggests that the music industry has three reasons for optimism:

First, the population of illegal downloaders has declined by 10% since '07 deterred by the threat of ISP and legal action against them and the broad availability of free legal music in the form of streams, downloads and webcasts.

72% of illegal downloaders including teenagers say they'd stop if contacted by their ISP. Only 6% say it wouldn't bother them if the ISP terminated their contract. The concerns may be driven by the finding that 61% mistakenly believe that their downloading is currently being monitored by ISPs.

The growth in available free music is diluting the need to download illegally. 52% of illegal downloaders say there is no need to steal because of the availability of free legal music to download or stream. It points to an opportunity for the music industry as they license social networks.

Second, the growing maturity of the digital model and exciting new revenue opportunities.

For the first time the incidence of legal downloaders has crossed the half way mark (51% of consumers) up by 9% from 47% in 2007. The growth in legal downloading is being driven mainly by the over 45 year olds up from 28% to 39% and the 35-44 year olds up from 36% to 44%. 2 out 5 over 35 UK year olds are now buying downloads at least once a month. The growth is being driven by the perceived functional advantages of downloads and the ability to cherry-pick tracks.

YouTube and MySpace addition of paid downloads. 68% of social networks users often discover new music on those sites (83% of MySpace users and 73% of YouTube's) and 50% sometimes recommend artists to others.

New revenue opportunities associated with digital delivery platforms. For example: 12% are willing to pay to watch live webcasts of gigs, and 34% are interested in going to cinemas to watch live gigs or a DVD premiere.

26% would strongly consider selling' music virally via their social network profile or blog

Third, YouTube has overtaken MySpace (41% Vs 25%) as the preferred social network for music and in doing so has reaffirmed the value of music videos.

Nearly 1 in 2 (47%) prefer to watch a music video if it's available and a surprising 71% say the artist's official music video is the most desirable digital content.

71% say they can find all the music videos they want on YouTube

YouTube's ecommerce platform provides a two-fold monetization opportunity - a share of the streaming-related advertising income and a share of digital download revenue.

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